This case concerned a cargo of vacuum flasks shipped from Shanghai (China) to Apapa (Nigeria) under a bill of lading dated 30th June 1981. Kenvee (Nigeria) Ltd (the plaintiff) was the consignee. The goods were delivered in early September 1981. Questions arose as to the sufficiency of delivery. There was said to have been damage to some of the flasks and short delivery of another quantity. In June 1982 the matter was taken up in Hong Kong on behalf of the plaintiff. Hong Kong was the appropriate venue because the proper law of the bill was Hong Kong law, and the Hong Kong courts were given exclusive jurisdiction. Promrt Shipping Co Ltd (the first defendant) alleged that it was not the owner or the demise charterer of the ship at the material time. The owner was a Panamanian company called Sibuyan Maritime Carriers Inc (the second defendant).

The claim, however, was brought against the first defendant in the belief that it was the carrier. On 14 September 1982, the first defendant pointed out the plaintiff's error and alleged that the first defendant was only the agent of the carrier. The first defendant also pointed out that the discharge had been completed on 1, 2 and 3 September 1981 and accordingly the one-year time limit under the Hague Rules expired on 5 September 1982. The plaintiff raised estoppel against the first defendant and alleged that the first defendant was the owner or carrier by estoppel. The plaintiff ascertained that the second defendant was the true shipowner and applied to join it as co-defendant.

Held: Judgment for the plaintiff.

The matter gives rise to two entirely separate issues. The first is whether a time bar has yet operated in favour of the second defendant. The second defendant says that in the events that have occurred, any claim against it has been discharged, and the plaintiff no longer has any cause of action to advance against it. The second issue, which arises only if time has run in favour of the second defendant, is whether in such circumstances: (1) the Court has a discretion which it can exercise in the matter; and (2) if so, whether it should exercise any discretion in favour of the plaintiff.

The first issue raises two questions about the construction of the bill of lading. The first question is what the bill's relevant provision is; the second question is the meaning of the phrase 'suit is brought' which appears in the bill.

As to the first question, there are two candidates. The plaintiff says that it is cl 36. The first sentence of this deals with notice of defects. The second sentence goes on to say: 'Any claims against the carrier, regardless of their legal nature, in respect of damage to or loss of goods carried or to be carried under this Bill of Lading-or under its condition, shall be time-barred unless suit is brought within one year after delivery of the goods or the time when the goods should have been delivered.' The alternative view advanced by the second defendant is that both cl 36 and art 3.6 of the Hague Rules apply. Article 3.6 deals with several matters arising out of notification of damage and includes this: 'In any event, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when goods should have been delivered.'

The outcome turns on cl 2 of the bill, which says: 'This Bill of Lading shall have effect subject to the provisions of arts 1 to 7 of the Hague Rules ... unless otherwise provided for in this bill of lading. These Hague Rules shall be deemed to be incorporated herein and nothing herein contained shall be deemed a surrender by the carrier of any of the rights and/or immunities under the said Hague Rules.' The Court prefers to give the phrase 'otherwise provided' its natural meaning, namely: is there another relevant provision in the bill? The wording of the bill suggests that its drafter wanted cl 36 to apply in preference to the Hague Rules. In particular, the drafter did not want the potential confusion which can so readily arise if there are two different contract provisions covering substantially the same subject matter. The words 'otherwise provided' are put in to clarify that the only relevant provision in this bill of lading is cl 36. This is done by making sure that it is not incorporated in 'these Rules' in the second sentence. Further, the adoption of cl 36 does not constitute any surrender of rights or immunities. Therefore, the time limit provision in this bill of lading is cl 36.

The next question is the meaning of the phrase 'unless suit is brought' in that clause. The hallmarks of the necessary suit are spelled out in the clause itself. First, it has to make a claim against the carrier regardless of its legal nature. Secondly, the claim has to arise or be made regarding damage to or loss of goods carried under this bill of lading or under its conditions. The third hallmark is that it has to be made by someone who is interested in the goods, more probably by someone who is the holder or endorsee of the bill of lading. Those are the three basic requirements. The plaintiff's submission is that claims additional to, or alternative to, the initial claim can be made in such circumstances after the expiration of the 12 month period. The second defendant disagrees.

The authority Kalimantan Timbers Co v Mighty Dragon Shipping Co SA [1980] HKCA 276 (CMI1186) is binding upon this Court, to the effect that an alternative claimant can be added to a suit after the expiration of 12 months. In this circumstance, the Court concludes that the suit is brought against the second defendant for the purposes of cl 36 since it is brought by somebody claiming as owner against someone said to be the carrier.